Car production falls with auto makers off to a rocky 2025 amid 'perfect storm' of issues, more job cuts and EV output delays

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Vehicle production in Britain declined by almost 18 per cent year-on-year amid warnings that the industry is facing a 'perfect storm' of issues that has triggered a rocky start to 2025 for the automotive sector.

Factories built 71,104 cars and 6,908 commercial vehicles in January, down some 16,800 units on the same month in 2023, the Society of Motor Manufacturers and Traders confirmed on Thursday.

The trade body said there was a slower than expected rollout of new models as manufacturers responded to 'softening demand in the UK and other key markets'.

Chief executive Mike Hawes added: 'UK vehicle producers face a perfect storm of global trade uncertainty, challenging manufacturing conditions and a market transition which is proving tougher than expected.

'The sector is doing all it can to keep production plans on track but needs Government to ensure automotive is at the heart of its forthcoming industrial and trade strategies, with promised funding invested as soon as possible. 

'Doing so will help ensure our competitiveness and safeguard the billions of pounds of investment, jobs and economic growth which is now at stake.'

It comes just one day after British luxury car maker Aston Martin confirmed it will cut 5 per cent of its workforce after losses widened by a fifth last year and it sold fewer motors than in 2023.

BMW also announced over the weekend that it has paused a huge £600million upgrade to Mini's Plant Oxford in Cowley - which was due to begin assembly of its latest electric vehicles next year - due to cloud of industry uncertainty.

Vehicle production in Britain declined by 18% amid warnings that the industry is facing a 'perfect storm' of issues that has triggered a rocky start to 2025 for the automotive sector

Production of electric, plug-in hybrid and hybrid vehicles increased by 1.5 per cent to 30,028 models, with greener powertrains accounting for more than two in five (42.2 per cent) passenger cars assembled in January.

This is the highest monthly performance for 'electrified' cars since December 2022 as the nation's auto plants continue to transition away from conventional petrol and diesel outputs ahead of Labour's planned ban on sales from 2030.

Four out of five cars built in the UK in January were exported, with overseas markets still the major driving force behind British auto manufacturing.

The EU remained the most important region, taking just over half of exports, followed by the US (18.6 per cent), China (6.2 per cent), Turkey (3.5 per cent) and Japan (3.4 per cent). 

Passenger car production alone fell by 14.3% in January. The 71,084 models built last month was down some 11,900 units on the same month in 2023, official figures show

Aston Martin said on Wednesday that it will be cutting 170 jobs across the business as part of a cost-cutting plan - though did not reveal if these roles are manufacturing or office based

The British luxury car firm also said it had delayed the release of its first EV yet again, having already pushed its release back over concerns regarding a lack of appetite for electric models

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Despite the rise in electrified vehicle production, Aston Martin confirmed this week it has - for a second time - delayed the release of its first EV.

The company said it will instead prioritise its mid-engined plug-in hybrid electric vehicle 'Valhalla', and launch its first BEV in the latter part of this decade.

Last year, the group pushed the launch of the BEV to 2026 due to lack of consumer demand.

Since it was acquired by Canadian billionaire Lawrence Stroll in 2020, Aston Martin has pushed on with a swathe of new model launches in a bid to turn its ailing fortunes around.

It recently appointed Adrian Hallmark as its new chief executive, with him taking on the role in September amid a ramping up of sales of its new Vantage and DBX707 models, which it said helped boost production volumes.

The group also launched its flagship Vanquish model in September.

Despite boasting a slew of new product launches on the slate, Aston Martin also said on Wednesday that it will be cutting 170 jobs across the business - though did not reveal if these roles are manufacturing or office based.

Bosses said the measures are to ensure the company is 'appropriately resourced for its future plans', calling the job cuts a 'difficult but necessary action'.

The group is targeting annual savings of £25million and expects to hit about half of that total this year.

It saw its debt pile surge by 43 per cent to £1.16billion in 2024, while shares were down about 33 per cent over the period.

The announced job cuts follow similar statements from auto makers in November.

Britain's biggest car maker Nissan said it will axe 9,000 jobs and 20 per cent of its global manufacturing capacity. In the same month, Ford said it will cut about 800 roles across the UK over the next three years as part of a wider European jobs cull.

Vauxhall's parent group Stellantis also revealed it would be closing its Luton van production site after almost a century, putting some 1,100 jobs at risk. It has recently reaffirmed the plans, with manufacturing to scale back from April and cease entirely in June.

BMW this week has also confirmed it has paused its £600million investment at the Plant Oxford manufacturing site because of uncertainty in the industry

Mini was due to start building next-gen EVs at the Cowley plant next year. However, due to 'multiple uncertainties facing the automotive industry', BMW said it is now rethinking the plan

Another UK car maker recently announcing a change of plans to its proposed EV production is Mini.

Over the weekend, its owner BMW said it has paused its £600million investment at the Plant Oxford manufacturing site because of uncertainty in the industry.

In 2023, it was announced Mini would become an EV-only maker from 2030, with production of its next-generation battery cars at the Cowley factory beginning in 2026.

In the meantime, its latest electric models - including the new Cooper and Countryman - are being made in China as part of a deal struck with Great Wall Motor.

But due to 'multiple uncertainties facing the automotive industry', the BMW Group said it is now rethinking the plan to bring EV production back to Britain next year.

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Mini has said the sizable redevelopment and upgrade of its Cowley factory in Oxford was underway 'to make the plant future ready' but has told the UK government it will be reviewing the timeline for assembly, knocking back a £60million grant from ministers for the project at the same time.

A spokesperson for BMW said: 'Given the multiple uncertainties facing the automotive industry, the BMW Group is currently reviewing the timing for reintroducing battery-electric Mini production in Oxford.

'As part of this discussion, we agreed not to take the previously announced grant, but we remain in close dialogue about our future plans.'

Responding to the SMMT's production figures, a government spokesperson said: 'We recognise the global challenges car manufacturers face, and we are working closely with businesses across the sector to ensure the UK remains a top destination for investment in automotive manufacturing.

'This government will continue to support our world-leading automotive industry, and its continued success has a big role to play in our mission to grow the economy.

'We've already backed the sector with over £300million to drive uptake of electric vehicles and £2billion to support the transition of domestic manufacturing announced in the Budget.'

Sharon Graham, generate secretary at the Unite union, said: 'The UK auto industry is at a crossroads, with thousands of jobs on the line. 

'The government must act to prevent the low-volume crisis from permanently shrinking the sector. 

'Labour’s industrial strategy must chart a clear path through industry upheaval, ensuring a just transition for auto workers.'